Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (35/2021 Disciplinary Board) (01/2021 Authority) and imposition of a fine of seven thousand Dinars against 1- Middle East Financial Brokerage Company 2- Kuwait Clearing Company for violating (Anti-Money Laundering and Combating Financing of Terrorism) of Module Sixteen.

Announcement Regarding Issuance of Disciplinary Board Resolution No. (35/2021 Disciplinary Board) (01/2021 Authority) and imposition of a fine of seven thousand Dinars against 1- Middle East Financial Brokerage Company 2- Kuwait Clearing Company for violating (Anti-Money Laundering and Combating Financing of Terrorism) of Module Sixteen.

For the following reasons:

First: Middle East Financial Brokerage Company, due to its violation of the following:
1) Provision of Article (3-5) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments.
2) Provisions of Items (1 and 5) of Article (3-6) of the same aforementioned Module.
3) Provision of Items (1 and 3) Article (3-24) of the same aforementioned Module.
4) Provision of Items (1 and 3) of Article (4-1) of the same aforementioned Module.
For its failure to comply with the due diligence procedures towards its client represented by Q8 Capital Investment Company, as well as its failure to complete the required data and information before executing transactions for the client, which led to its direct contribution to enabling Q8 Capital Investment Company to practice an activity that requires a license in light of the issuance of the Authority’s Resolution No. (133) of 2018 Regarding Cancelling the License of all Securities Activities of Q8 Capital Investment Company.

Second: Kuwait Clearing Company, due to its violation of the following:
1) Provision of Article (3-5) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments.
2) Provision of Items (1 and 5) of Article (3-6) of the same aforementioned Module.
3) Provision of Items (1 and 3) Article (3-24) of the same aforementioned Module.
4) Provision of Items (1 and 3) of Article (4-1) of the same aforementioned Module.
For its failure to take measures to freeze or cancel the client’s trading account, Q8 Capital Investment Company - Trade No. (---) immediately after the issuance of the Authority’s Resolution No. (133) of 2018 on October 1, 2018 Regarding Cancelling the License of all Securities Activities of Q8 Capital Investment Company, which directly contributed to enabling a person who is not licensed by the Authority to practice an activity that requires a license, although among the documents required by Kuwait Clearing Company to open a trading account for clients for a company that practices the activity of an Investment Portfolio Manager is a copy of the license of the regulatory authority represented by the Authority.
It also failed, as it is the competent authority to open the trading account, with the due diligence procedures towards the client, as well as the failure to complete the required data and information before carrying out any transactions for the client.

The Resolution included the infliction of the following penalty: -
“First: - Middle East Financial Brokerage Company is fined an amount of 2000 Dinars, two thousand Dinars for the attributed violations.
Second: - Kuwait Clearing Company is fined an amount of 5,000 Dinars, five thousand Dinars for the attributed violations.” 

In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these Laws in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.